Chrysler CEO on Chery Deal

Posted by: Matthew Vella on January 2, 2007

Chrysler’s corporate blog, TheFireHouse (registration required) just posted (about 15 mins ago) an interesting “interview” between the blog’s “editor” and Chrysler Group President and CEO Tom LaSorda. The topic? The deal to distribute Chery’s made-in-China small cars, a.k.a. subcompacts, a.k.a B-segment vehicles, in North America. Though somewhat padded, the exchange hits up some interesting topics, notably the political implications and the copmany’s lack of non-truck or SUV models.

The exchange with the juicy in bold:

Question – Why partner with Chery, or any Chinese car company for that matter, instead of building the car here in North America or at a DaimlerChrysler plant in China?

LaSorda – “Well, first of all, we’re talking about a B-segment, which is a very small compact car, and if you look at the U.S. market or even in NAFTA, all the B-segment vehicles are being imported from the Asia region. The major reason is their cost structure and their ability to engineer and design in those segments. And we really cannot compete nor can anyone making it in this region.”

Q – This being an election year, will this be used as a political statement about more jobs going to China?

LaSorda – “Well, first of all, I can’t control what people say politically. What I can control is the fact that we are already exporting cars into China – the Chrysler Group. We’re also producing locally the 300, the minivan into China, and most people don’t know that we’re exporting a large percentage of the componetries of these cars – the engines, the transmissions and major high-cost parts that are made by Americans and Canadians primarily – are being shipped over to these markets for us in China. I tell you, there are a lot of jobs being preserved by our growth in China and our exports there. And this (the Chery deal) will have no impact because we’re not even involved in the B-segment today.”

Q – Can China build a quality car that will satisfy North American consumers?

LaSorda – “Well, absolutely, and our role here is to ensure that our engineering and design and quality teams are working with Chery along the way to meet the stringent standards, not only in North America but around the world. And that teamwork will continue throughout this project.”

Q – Will this car mean the death of the Hornet, the muscular small car concept that we saw at the Geneva auto show this year?

LaSorda – “The Hornet is a great statement of our design. It is also a statement that it’s something that we’re going to continue to take a look at, and depending on the business case going, we’ll look at that independently from this particular project.”

Q – How will this help the Chrysler Group’s attempts here in the United States to shift some of the mix away from pickup trucks, minivans and SUVs with gas prices high right now?

LaSorda – “Well, the consumers are, quite frankly, just looking for choice, and the fact that the Chrysler Group doesn’t even play in this segment, it’s very important that we do. This is important for our growth here, but not only here in the NAFTA region - and I’m talking Canada, Mexico and the United States - but the European markets and other growth areas, where the growth is going. We need to follow with a cross-section of great cars and trucks across our whole portfolio. That’s why we need this in this region as well. Our attempt here will help us in this region because the gas mileage of this car will be exceptionally good and we’re looking forward to this coming in to help us as this segment is growing in this region and we just need to play a part.”

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